In a Nov. 1 research note, Mackie Research Capital Corp. analyst Bill Newman reported that Touchstone Exploration Inc. (TXP:TSX; PBEGF:OTC.MKTS) increased its term credit facility to $20 million from $5 million to fund drilling of a second exploration well in the Republic of Trinidad and Tobago.
Under the terms, Touchstone will keep paying, on a quarterly basis, 8% per year interest. Also, it will begin paying the principal on Jan. 1, 2021, of $1.1 million per quarter with the full amount due by the facility's maturity date, Nov. 23, 2023.
Another change, Newman relayed, was an increase of the royalty payable on future production to 1.33% per from 1%, payable quarterly through Oct. 31, 2023.
Newman noted that Cascadura-1, the second of Touchstone's 'four exploration wells, is currently being drilled. Initial results are expected in mid-November as are production test results from Coho-1, the first well of the quartet. "If the Coho-1 well is successful, it has a relatively short tie-in distance of about 3.5 kilometers," added Newman.
Mackie has a Speculative Buy recommendation and a CA$0.50 target price on Touchstone. This reflects a 133% projected return as the company's current share price is around CA$0.22.
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Disclosures from Mackie Research, Touchstone Exploration Inc., Update, November 1, 2019
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